As part of the recent updates under the UAE Corporate Tax Law, businesses may now form a tax group for corporate tax purposes, as outlined in Article 40 of the legislation. This provision enables simplified compliance and potential tax efficiencies.

To help you understand and prepare for this, here are the key requirements for forming a tax group:

What Are Tax Groups Under the Corporate Tax Law?

According to Federal Decree-Law No. 47 of 2022, Article 40 states that the parent company and its subsidiaries must be based in the UAE.

The following conditions must be met to form a tax group:

• The parent company must own at least 95% of the share capital of its subsidiaries and be entitled to their profits and net assets.
• Both the parent company and its subsidiaries must be tax resident persons in the UAE.
• Neither the parent company nor any subsidiary can be an Exempt Person or a Qualifying Free Zone Person.
• The parent and subsidiary companies must have the same financial year and use the same accounting standards (as per Ministerial Decision No. 114 of 2023).

All these conditions must be satisfied for each tax period to maintain tax group status. If the group ceases to meet the criteria but later qualifies again, it may reapply for tax group status with the FTA.

Why Form a Tax Group?

Forming a tax group can provide several advantages, including consolidated tax filings, the ability to offset losses within the group, and enhanced cash flow management.

How We Can Help:

Our team can support you through every stage of the process, ensuring full compliance with regulations and optimizing the benefits for your business. We offer assistance with:

• Assessing eligibility for forming a tax group
• Preparing the required documentation and application
• Ensuring ongoing compliance with corporate tax regulations

If you have any questions or need assistance in forming a tax group, please don’t hesitate to reach out to us.

To learn more about tax groups under the Corporate Tax Law, visit:

1. https://www.spectrumaccounts.com/tax-group-other-relevant-provisions-as-per-uae-corporate-tax-law/
2. https://www.spectrumaccounts.com/uae-tax-group-part-2-a-deep-dive-into-tax-groups/

Why Choose Spectrum Auditing?

At Spectrum Auditing, we are more than just an auditing firm—we are your trusted partner in navigating the evolving UAE regulatory landscape. Here’s what sets us apart:

• Unparalleled Expertise: Our team includes accredited auditors, management accountants, and consultants with in-depth knowledge of UAE laws to ensure your business stays compliant.
• Streamlined Solutions: We offer a comprehensive approach, guiding you through every step—from risk assessment to report filing.
• International Recognition: Whether it’s audits or compliance, we adhere to global standards (ISA, IAS, IFRS), ensuring international credibility.
• Personalized Support: Every business is unique. We tailor our services to your specific needs and are here to answer all your questions.

Partner with Spectrum Auditing today. Let us focus on your compliance, while you focus on running your business.

Contact us today for a consultation at +971 4 2699329 or email [email protected].